Wednesday, 26 April 2017

Public body fears hold back subletting plans

The government is holding back from giving housing associations the same powers to tackle subletting as local authorities due to fears over their status.

Officials are concerned that if housing associations were given the power to prosecute tenants who sublet properties it would raise questions about whether they are public or private bodies.

The status of housing associations is important legally and financially as it affects how they can be run, and how historic debt held on their books is classified.

The government issued a consultation yesterday (Wednesday) on creating a new offence of tenancy fraud. This would allow tenants who sublet their properties to face criminal rather than civil charges, meaning they could face up to two years in prison and fines of up to £50,000.

The consultation proposes to give local authorities the power to bring prosecutions for tenancy fraud. It states it would not be ‘practicable’ to extend the same power to housing associations, but notes they could bring private prosecutions, or work with local authority partners on a case.

Housing associations would also be blocked from using new proposed powers to access data about tenants. Under the plans in the consultation, local authorities would get improved access to information from banks, building societies and utility companies to help them identify if properties are being sublet.

Housing associations would not be able to access this data directly, because of concerns about the implications giving them this power could have on their private status, and would instead have to work with local authorities to use the information.

The consultation notes: ‘We envisage joint working arrangements being extended to enable housing associations to benefit from any new powers given to local authorities.’

It also states that the introduction of a criminal offence of tenancy fraud would not prevent social landlords using civil proceedings to evict subletting tenants, and they should ‘consider what the best enforcement approach is in the context of a particular case’.

Reaction to the subletting proposals has been mixed. David Orr, chief executive of the National Housing Federation, welcomed the plans.

‘Criminalising subletting will mean that the profits will become the proceeds of crime and will be available for confiscation on conviction. This is a very serious penalty, in addition to the loss of the tenancy, which is the usual sanction at present,’ he said.

But Lindsey Williams, chief executive of Futures Housing Group, warned that seeking a criminal prosecution should be a last resort. ‘If tenants are sub-letting because they are genuinely struggling to cover their rent and other bills, then we should be offering help before beginning legal action,’ she said.

Shadow housing minister Jack Dromey backed the move to criminalise subletting, which was instigated by Labour housing minister John Healey in 2010, but suggested the government is not looking at the bigger picture.

‘The vast majority of people living in council houses pay their taxes and play by the rules,’ he said. ‘The real problem is that this Tory-led government’s failed economic policies led to a catastrophic 99 per cent collapse in the building of affordable homes in the last six months.’

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